Lean Office & Business Processes Not Just for Manufacturing

1. Lean Office & Business ProcessesNot Just for Manufacturing Michelle Manary & Deb Harcus Manary Harcus Consulting Corp

2. Agenda • Organizational Effectiveness & Lean • What is Lean & how does it work? • Lean Office Tools & Terminology • Success Strategies • Role(s) of HR in Lean Initiatives • 8 Service Industry Wastes • Value Stream Mapping • Case Study • Debrief, Q&A

3. Organizational Effectiveness & Lean Source: Queens University

4. Lean is a system that continually searches for and eliminates waste throughout the total enterprise and value chain Lean applies to office and administrative environments In Service industries, there are 8 types of waste Eliminating waste results in: Shorter lead times Reduced costs Less inventory Higher throughput Higher return on assets Six Sigma is a system focused on the elimination of defects. What is Lean?

5. 5S & Visual Controls Kaizen Event Value Stream Mapping Pull vs Push Some Lean Office Tools The Language of Lean 5S Kaizen Gemba Pitch VSM Value Add SIPOC Mapping Symbols Takt Pull vs Push Hansei Heijunka

6. Base decisions on long-term, system-wide goals Create continuous flow to bring problems to the surface Level the workload (Heijunka) Build a culture of stopping to fix problems Standardized work Use visual controls Use reliable, thoroughly tested technology that serves your people and processes Grow leaders who thoroughly understand the work, and can teach it to others Respect your extended network by helping them improve Go and see for yourself (get in the gemba) Make decisions slowly, by consensus and implement rapidly Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen) Strategies for Success with Lean Source: The Toyota Way, Liker 2004

7. Ensuring top down support & alignment Review/revise HR strategy to support Business strategy Change Management Organizational Effectiveness Develop Managers who are Lean Facilitators Redefine Jobs to support Value Stream Manager role Lean Participant Various Role(s) of HR in Lean Initiatives

8. Corrections Transportation Extra processing Inventory Approval process Excess motion Backlog in work queues Underutilized employees 8 Service Industry Wastes

9. 5S & Visual Controls Sort– What is not needed. Sort through, then sort out. Set in Order – What must be kept, make it visible and self explanatory. Shine – everything that remains. Standardize – Set standards for the first 3S’s Sustain– Requires discipline, stick to the rules and make them a habit 5S is not free, but it does have accuracy and efficiency benefits

10. A Successful Office Kaizen Blitz (pronounced Ki-zen) • Kaizen Means: “Continuous Improvement” • A “Kaizen Event” is normally 3 days long • Starts with a SIPOC map • Using Value Stream Mapping techniques: • - Map the current state • - Analyze & kaizen blitz possible improvements • - Map future state • Begin to implement changes & measure results

11. Suppliers Inputs Processes Outputs Customers Defines the practical limits of your mapping activity (scope) Ensures you gather all the information you’ll need Identifies the processes (which may have sub-processes) Captures the voice of the customer. SIPOC Map

12. SIPOC Map Example New Employment Process – SIPOC Map Suppliers Inputs Outputs Requirements Customers Process Hiring Budgets Exec Committee Recruitment & Selection Qualified Benefits Enrolment Orientation Training New Employee Manager Payroll & Tax Setup Job Descriptions Dept Managers Fits XYZ Culture Candidates Recruiters Co-workers Oriented to Business Customers Setup for Payroll, Benefits

13. VSM=The assessment and planning tool of lean practitioners 3 states exist: Current, Perceived, Future The only way to ensure you capture the true current state is to: walk the process Current state map Future state map Implementation plan Value Stream Mapping Drawing Risk of not mapping the current state is that you have no baseline or justification for making changes. Drawing Plan & Implement

14. Value Stream Mapping Symbols xcel IN Customer or Supplier Information Flow Delay Time Inventory/Inbox Process Box P/T=2min 1 Day L/T=0 days Schedule % C/A=99% Electronic Information Flow Other Electronic Inbox (queue) Data Box Material (Paper) Movement Workflow Worker Iterations or Rework Wor

15. Value Add, Process & Lead Time Process #1 Rework, Checking, Revisions Non-Value Add Time Value Add Time Queue/Wait Time Process Time Lead Time

16. Document customer information & need Identify main processes to deliver service Start with customer and work backwards Collect data on main processes (attributes/metrics) Perform value stream walkthrough and fill in the data boxes, including “work-in-process” Identify process boxes where flow stops and batch or queue occurs In the office, inventory is information in a queue (paper or electronic) Establish how each process knows what to process next (information flow) Can be formal or informal; how is work prioritized? Calculate lead time vs process time Calculate % accurate & complete Calculate value add Map Current State

17. Example - Current State VSM Map Insurance Claim Processing Timeline Value Stream Metrics - Process Time (P/T): 75 min Lead Time (L/T): 26-39 days % Complete & Accurate (%C/A): 29%

18. Process & available time Set up time (eg: between computer systems) Lead time/turnaround time (LT) Typical batch size or frequency % Complete and Accurate (%C&A) Rework/revisions Number of people involved Downtime (eg: information systems) Inventory – queues of information (eg: electronic, paper) Demand Team needs to decide which attributes/metrics will work best for tracking progress toward the targets. Typical Data Attributes/Metrics

19. Each Value Stream needs a Value Stream Manager For product and/or service ownership beyond the function Assign responsibility for future state mapping and implementing lean value streams to line managers with the capability to make change happen across functional and departmental boundaries Value Stream Managers should make their progress reports to the senior manager on site. Value Stream Managers

20. Now that the process is visible, what problems do you see? Challenge every step – ask the following: What is really needed by the customer? (Takt) How often do we need to check our performance? (Pitch) Why are the current steps performed? What can be done differently or not at all? Is the order of the steps creating waste? Can we eliminate certain steps or do others more intelligently? What assumptions underlie the current process? Are existing tools and guides appropriate? Go back to the 8 wastes to see if the step is a waste. Which Steps Add Value and Which are Waste?

21. What does the customer need and how are we doing in serving this need? Takt time=Demand rate Which steps create/add value and which are waste? How can we flow work with fewer interruptions/handoffs? How can we control work between interruptions/handoffs? How will we balance the work load and/or different activities? How do we set pitch? Pitch is the tempo of the output Ideal: Takt = Pitch What process improvements will be necessary? Can we establish a pace or rhythm that improves processing? Future State Questions

22. A document board in a highly visible area, and as close to the work area as possible Post the Current and Future state maps Show Implementation Timelines Key measures of progress and success Value stream performance indicators Implementation progress & impact Other documents as required (as few as possible) Project Tracking Center What gets measured gets monitored. What gets monitored, gets done.

23. Identify map developer & spokesperson for your group Read case & then map the current state process You have 2 colors of sticky notes – use one color for a process step, the other color for time spent waiting for something to happen Utilize the mapping symbols Identify waste and problems Gather and measure a variety of attributes, such as: PT – process time LT – lead time %VA - percent of process that adds value %C/A – percent of process that is correct & accurate %D/T – delay time # of people involved # of process steps required Brainstorm kaizen opportunities Stop Case Study #1

24. What do you see? What problems are pointed out? Where were some of the “lean” opportunities? Discuss areas in your business that could benefit from lean thinking Case Study Debrief

25. Identify all process improvements that could be done or will be necessary to implement the future state (Kaizen “bursts” or opportunities) Prioritize the list for quick hits and big hitters based on data or consensus Decide which attributes will be the best ones to use Map the desired future state & estimate expected results Consider Six Sigma for projects with unknown solutions and the root cause is unknown Process Improvements

26. Measure The Impact

27. Questions?

28. Lean is a new beginning Reinventing your business, increasing your competitive position, a differentiator It’s a continuous improvement journey Not an event or a project Lean is a way of thinking that all employees ultimately learn and continue themselves. It becomes part of the company culture and an organizational commitment Not The End